Legal Software Deep Dive – Legal Software Interview With Itai Gurari

We at Bowery Capital released the 2016 edition of Opportunities In Vertical Software in November, which laid out our point of view on ten specific verticals and the potential for various software solutions to dominate each of these ten verticals in the coming years. For ten weeks, we are releasing content focused around the impact of software on these ten industries. Following our Restaurant Software Interview released last week we conducted a legal software interview with Itai Gurari to discuss the case law research space. Itai Gurari has a wealth of experience in the legal technology space. He dropped out of a PhD program in Computer Science to go to law school. After graduating from Columbia University School of Law, Itai practiced as an attorney for 1.5 years before founding Tracelaw.com, a case law search engine, in 2008. A couple years later he joined Google to work on their case law search engine, Scholar, and left in 2011 to start Judicata, a new Legal Research Engine marrying advanced semantic analysis technologies with high quality lawyer curated content.

What are some of the most interesting developments in your industry over the last 10 years and how has software added value?

Shifting to electronic platforms has been the most significant change, but beyond that very little has changed. Search algorithms have improved slightly, but nowhere near as much as they could or should have. Currently, legal research is dominated by the duopoly of LexisNexis and West. They maintain large databases of case and statutory law, as well as proprietary editorial content. They are the default tools used by lawyers the world over. While their content is fairly comprehensive, their technical offerings are relatively primitive. They’ve focused more on providing access to content, than divining valuable data backed insights. Over the past decade Bloomberg has also made a push into the legal research space, but has yet to gain significant market share.

Innovation in software development practices such as Amazon Web Services and the growing volume of open source code have brought down costs. These allow for more rapid innovation in the development of accurate and fast search engines. They also allow companies to build better user experiences quickly and at a reduced cost.
More recently, analytics tools are beginning to provide valuable insights for lawyers. The structuring of large amounts of historical data has exposed valuable signals that were previously buried in large amounts of noise. As search algorithms improve and the time spent on understanding the law diminishes, more time can be spent on crafting the best possible arguments, with analytics data helping to guide the way. That said, to date the analytics tools have focused mostly on the cost and time of litigation, with little being done to progress the quality of legal argumentation.

What are some of the challenges / hurdles that still exist?

There are very large inefficiencies in the legal research process that result in lost hours and lower quality legal research being done. Finding and understanding the state of the law is time consuming and frustrating. A major issue for lawyers is knowing when they are done. Is there a relevant exception to the rule they’ve uncovered? Has the case they want to rely on been criticized more recently? What is the best case to cite?
Moreover, clients are increasingly refusing to pay for time spent researching the law, and firms are left to eat the cost. Thus, there is a lot of demand for tools that reduce costs and improve outcomes.
However, developing such tools – initially search and later analytics and artificial intelligence tools – requires first creating a detailed “map” of the law. This is time consuming and costly, requiring both advanced technologies and manual curation. Fortunately, it is a one-time cost. Whereas the core LexisNexis and West content was developed over the course of 140 years, modern technology now makes it possible to structure that legal content one hundred times faster. Moreover, it can be done with far greater granularity and precision, opening up the possibility of analytics and artificial intelligence tools that otherwise couldn’t exist. Nevertheless, structuring this data remains a massive and daunting challenge.

When looking to enable a process with software what are the most important points for a buyer to think through?

There are two major players in the case law research space, LexisNexis and West, with Bloomberg being a more recent entrant. Beyond those players there is no other holistic solution. So when making a purchasing decision, the most important question to answer is whether the value generated by the supplemental tool exceeds the cost. A key question to ask is not only will the tool help the lawyer understand what the law is more quickly, but will it allow them to achieve better outcomes for their clients? West and LexisNexis offer solid broad-based tools, but they leave open room for many more niche and advanced tools. Fortunately, many of the tools coming online these days add a lot of value.

What is your vision for the industry in 5-10 years?

Where the industry moves is highly dependent on how powerful the “maps” are that the technology providers build. Just as better road maps have powered major advances in autonomous vehicles, better legal maps have enabled faster research engines and stronger analytics tools. As research times drop, lawyers will spend more time on developing argumentation strategies. Outcomes will improve and costs will go down, creating a more efficient and just system.

Thank you for reading this Legal software interview with Itai. Make sure to check out the 1st Legal Software Deep Dive post discussing the History & Market Dynamics of legal technology as well as the 2016 edition of Opportunities In Vertical Software for the full report. We will be back tomorrow with our final post on the Legal software industry and the software that powers it.

Michael Brown

Michael is a Founder & Managing Partner at Bowery Capital based in New York. Prior to Bowery Capital, Brown was a Co-Founder and General Partner at AOL Ventures. Before AOL Ventures, Brown worked for the investment arm of Richard Branson’s Virgin Group. He began his career at Morgan Stanley as an equity research analyst. Outside of his professional life, Brown serves on the Board of Directors of the National Forest Foundation and the Columbia College Alumni Association. He holds a B.A. from Columbia University.

On Twitter

NEW POST: Overcoming sales objections is tough in early stage companies. You hear the lines over & over again & believe your product is best. Here are some tips from the front line that work for our founders when they are faced with overcoming objections. https://t.co/WDBdazjVBF

ICYMI BLOG POST: We’ve talked about product pricing a bunch on our blog but never in the context of DevOps. DevOps pricing is one of the more interesting elements of the entire infrastructure ecosystem pricing. Here are some key takeaways! https://t.co/XFcoYFHJqk

ICYMI PODCAST: We hosted @davidappel, Head of the SaaS Vertical at @SageIntacct, to discuss "Building Your SaaS Dashboard." We talked about choosing the right metrics to include + how to organize your tracking efforts into an actionable #SaaS dashboard. https://t.co/KIVerCvSRT